“This bill will set a new standard for investment management in Alaska” Rep. McCabe introduces bill to change management of fund investment decisions

On Monday, Representative Kevin McCabe introduced HB 174, a bill that, if passed, sets out to change the management of state funds, “restricting fiduciary actions by a fiduciary of a state fund, the Alaska Retirement Management Board, and the Alaska Permanent Fund Corporation Board that have the purpose of furthering social, political, or ideological interests,” it read.

The bill seeks to ensure that fiduciaries of state funds prioritize the financial interests of the beneficiaries above all other considerations when investing public funds, meaning that investment decisions will be made solely on the basis of financial gain, rather than any external social, political, or ideological goals, according to a press release from Representative McCabe.

A fiduciary is a person or organization that acts on behalf of another person or persons, putting their interests ahead of their own, with a duty to preserve good faith and trust. It requires being bound both legally and ethically to act in the other’s best interests.

According to the bill, the fiduciary of a state fund may not take an action involving investment for the purpose of furthering a social, political, or ideological interest.

The bill clarifies that, except as required under applicable federal or state law, an action is considered to have the purpose of furthering a social, political, or ideological interest if evidence indicates a commitment to: eliminating, reducing, offsetting, or disclosing greenhouse gas emissions; instituting or assessing corporate board or employee composition, compensation, or disclosure criteria based on social, political, or ideological characteristics; denying, limiting investment in, or limiting the activities or investments of a company for failing, or not committing, to meet environmental standards or disclosures; providing or limiting access to abortion, sex or gender change, or transgender surgery; or divesting from, limiting investment in, or limiting the activities or investments of a company for engaging in, facilitating, or supporting the manufacture, distribution, sale, or use of firearms.

“This approach is perfectly in line with Alaska's ongoing efforts to establish a comprehensive and sustainable long-term fiscal plan for the state, especially in light of the current economic challenges facing Alaska,” said bill sponsor Representative McCabe, whose district encompasses Big Lake up to Denali.

“This bill will set a new standard for investment management in Alaska, ensuring that the financial future of the state is secured for generations to come, and I am proud to introduce it.”

Through the press release, McCabe also said that by preserving the principles of the bill into law, Alaska joins a growing number of states that have introduced or enacted similar legislation, demonstrating a commitment to responsible investment management and fiscal responsibility.

“Through prioritizing financial gain over external considerations, board members of the Alaska Retirement Management Board and the Alaska Permanent Fund Corporation Board will be prevented from taking any actions that seek to advance social, political, or ideological interests concerning investments entrusted to the board.”

For more information, contact Angela Stephl, Office of Representative Kevin McCabe (907) 465-2679